We have identified a new population of CD11b+F4/80+CD68+ (macrophages) that express Foxp3. Our initial results indicate that these cells were observed in spleen, lymph nodes, bone marrow, thymus, peripheral blood, liver and other tissues. We devised a strategy to highly purify CD11b+F4/80+Foxp3+ macrophages using the Foxp3-GFP mice. Our results show that CD11b+F4/80+ macrophages expressing Foxp3 inhibited the proliferation of T cells whereas Foxp3neg macrophages did not. Foxp3pos macrophages inhibited the proliferation of T cells through cell:cell contact mechanisms or soluble factors. Foxp3neg macrophages acquired Foxp3 expression after activation which they displayed inhibitory properties indistinguishable from constitutively Foxp3pos macrophages. Phenotypically, natural- or induced-Foxp3pos macrophages expressed higher levels of GITR, CTLA-4 and IL-4R compared to Foxp3neg macrophages. The cytokine and genomic profiles of Foxp3pos and Foxp3neg macrophages were distinctive indicating that these cells have different biological functions. Furthermore, Foxp3pos macrophages induce de novo conversion Tregs, in contrast Foxp3neg macrophages did not. Functional analysis indicated that CD11b+F4/80+Foxp3+ macrophages are important for tolerance induction and are involved as well in tumor promotion and progression. Additionally, subpopulation of human CD14+ cells also expressed constitutively FOXP3. For the first time, these studies demonstrate the existence of a distinct subpopulation of naturally occurring macrophage regulatory cells (Mac- regs) in which their suppressive function is directly correlated to the expression of Foxp3. Taken together our preliminary results lead to hypothesize that CD11b+F4/80+Foxp3+ cells (Mac-regs) subpopulation is an important subset of regulatory cells critical in the homeostatic balance of the immune system regulating immune responses which contribute to T cell tolerance induction and tumor promotion/growth. In order to test our hypothesis the following specific aims will be addressed: Aim 1 will define the mechanisms by which Mac- regs inhibit other cells;Aim 2 will evaluate the mechanism of tolerance induction by Mac-regs;Aim 3 will evaluate the role of Mac-regs in tumor promotion and growth;and Aim 4 will evaluate and characterize human Mac-regs. PUBLIC HEALTH RELEVANCE: For the first time we have identified a population of macrophages that express Foxp3. The Foxp3+ MX are able to inhibit the effector function of T cells. In vivo biological functions of Foxp3+ MX indicate that these induce immune tolerance and are important in promoting tumor growth. These results indicate that Foxp3+ MX are an important subset of regulatory cells critical in the homeostatic balance of the immune system. Learning more about the behavior of Foxp3+ MX is critical to understand the pathological function of these cells which could be related to tolerance, autoimmunity, tumor immunity, organ transplantation, allergy, and microbial immunity.